France’s Total became the first major international oil firm to sign a development deal with Iran since Western sanctions were lifted earlier this year.
Total signed a Heads of Agreement (HoA) on Tuesday with the National Iranian Oil Company (NIOC).
The deal covers the development of phase 11 of South Pars, the world’s largest gas field.
The South Pars 11 project (SP11) will have a production capacity of 1.8 billion cubic feet per day, or 370 000 barrels of oil equivalent per day.
The produced gas will be fed into Iran’s gas network, Total said.
The later stage will involve the construction of offshore compression facilities, Total said.
Petropars, a fully owned subsidiary of NIOC, will hold a 19.9 percent stake and China’s CNPC will hold a 30 percent stake.
“Following Total’s successful development of phases 2 and 3 of South Pars in the 2000s, the Group is back to Iran to develop and produce another phase of this giant gas field. Total is delighted to have been selected by NIOC – it is a recognition of both our technical expertise and the partnership the Group has built with Iran over the years,” Total CEO and chairman Patrick Pouyanné said.
Iranian officials have been seeking billions of dollars in investment to boost production back up to pre-sanction levels.
Iran’s focus on growing production scuttled two attempts to seal an OPEC production deal earlier this year.
Iranian officials have said they will not consider participating in a proposed production plan until the country’s production rises to about 4 million barrels per day.
Strong demand from Asia helped boost Iranian production ticked up to a post-sanctions high of 3.67 million bpd in October, according to S&P Global Platts.